More trouble in paradise!
jwm
Ebh Bank, Sydbank Desert Denmark's Athletes Amid Credit Crisis
By Christian Wienberg and Bo Nielsen
Nov. 3 (Bloomberg) -- When Danish bank Ebh Bank A/S succumbed to the financial crisis six weeks ago, the fallout didn't just affect customers and clerks. Artists, musicians and swimmers also suffered.
On the day Denmark's central bank was forced to bail out the 110-year-old lender, Ebh Bank yanked sponsorship of a proposed sports and cultural centre in its home town of Fjerritslev, a few miles inland from the North Sea.
``We put the project on hold immediately,'' said Egon Korsbaek, chairman of Ebh, based 150 miles northwest of Copenhagen. ``We've supported large and small projects. We don't think we'll be able to continue with the bigger ones.''
Danes have three times more banks than the average European and the institutions are the biggest backers of sports arenas, fishing clubs and museums in small towns. Sponsorship is now under threat as Denmark becomes the first European economy to enter a recession. Eight banks have collapsed or were rescued or bought since the seizure in credit markets started last year.
Roskilde Bank A/S, rescued by the central bank in August in Denmark's first such bailout in more than a decade, will allow 25 ``major'' sponsorships to run out, spokesman Stig Bo Jensen said.
Sydbank A/S last month pulled 38 million kroner ($6.6 million), or 20 percent of funds, from Banktrelleborg A/S's foundation after buying the lender, which had ``significant financial problems.'' Sydbank Chief Executive Officer Carsten Andersen said the fund, which supports events in the eastern city of Slagelse, will now ``support fewer local projects.''
``Banks have mainly focused on small sports associations, so they will be among the first to suffer,'' said Thomas Badura, director of SponsorPeople, a consultancy that organizes sponsorship. ``Banks will cut down to the bare bones.''
Oysters, Herring
Banks dominate Denmark's 2.5 billion kroner ($460 million) sponsorship market, according to Copenhagen-based SponsorPeople.
Denmark has 140 banks serving its 5.5 million people. That equates to 33 lenders per 1 million residents, compared with an average European ratio of 12, according to statistics from the European Banking Federation.
The landscape is changing as smaller banks get swallowed up.
Morsoe Bank A/S, a regional lender in northern Denmark, on Oct. 30 agreed to take over Sparekassen Spar Mors, a local rival riddled with bad loans. Sparekassen had helped the local fishing club restore creeks in an area known for oysters and herring.
The central bank and a group of Danish financial companies acquired Roskilde, based in the city of the same name, on Aug. 24 after an external audit showed the lender was insolvent.
`Whole City Hurt'
Headquartered close to a cathedral where Denmark buries its kings and queens, Roskilde sponsored handball, sailing and soccer clubs in the city. Located at the end of a fjord, Roskilde plays host each year to one of Europe's biggest music festivals, which has drawn bands ranging from Metallica to U2.
``The whole city is hurt by the financial crisis now,'' said Carsten Wickmann, chairman of F.C. Roskilde, which plays in Danish soccer's second tier. ``Roskilde Bank was a patron for the city's sport and cultural life so they're leaving a huge gap.''
Roskilde Svoemning, the city's biggest swimming club, suspended plans to build a club house after the collapse of the bank, which was one of its three biggest sponsors, according to Niels Kaare Bruun, head of sponsorship at the club.
``Without a clubhouse, it will be harder for us to develop and hold on to our elite swimmers,'' Bruun said. ``There's a nervous and pressured atmosphere among sport clubs now.''
`Very Sad'
About 120 miles west, VestjyskBank A/S bought Bonusbanken A/S on Sept. 29 as losses mounted at the smaller bank. Three months earlier, Bonusbanken donated 10,000 kroner to Hammerum Idraetsforening, a local soccer club with 400 members, helping it send 130 players to a tournament in the southern part of Denmark.
``Without sponsorships and donations, our players won't be able to go to tournaments,'' said Eigil Pedersen, the club's chairman. ``Bonusbanken was the last local bank left and it's very sad that it's gone.''
The government last month decided to guarantee all deposits to help lenders suffering from the seizure in the global credit markets. As part of the accord, Denmark's banks won't pay dividends for two years, cutting donations to the bank foundations which sponsor events across the Nordic country.
In Fjerritslev, Ebh, which uses the slogan ``We are where you are,'' backed local events through one such foundation.
The bank dropped plans to support the proposed sports center, which would have included a gym, swimming pool and a music hall, after the country's central bank was forced to inject emergency money into Ebh.
The bank also sponsors local soccer and handball club Fjerritslev IF and help finance an indoor training facility, Ebh Arena, which opened a month ago.
``This is a small town and Ebh has been a symbol of our unity,'' said Ellen Helvind, 77, chairwoman of Fjerritslev's city museum, which is located in the town's now-closed brewery, and a customer of the lender. ``The bank has been very generous, so we're all very concerned.''
To contact the reporters on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net
Last Updated: November 2, 2008 18:27 EST
jwm
Ebh Bank, Sydbank Desert Denmark's Athletes Amid Credit Crisis
By Christian Wienberg and Bo Nielsen
Nov. 3 (Bloomberg) -- When Danish bank Ebh Bank A/S succumbed to the financial crisis six weeks ago, the fallout didn't just affect customers and clerks. Artists, musicians and swimmers also suffered.
On the day Denmark's central bank was forced to bail out the 110-year-old lender, Ebh Bank yanked sponsorship of a proposed sports and cultural centre in its home town of Fjerritslev, a few miles inland from the North Sea.
``We put the project on hold immediately,'' said Egon Korsbaek, chairman of Ebh, based 150 miles northwest of Copenhagen. ``We've supported large and small projects. We don't think we'll be able to continue with the bigger ones.''
Danes have three times more banks than the average European and the institutions are the biggest backers of sports arenas, fishing clubs and museums in small towns. Sponsorship is now under threat as Denmark becomes the first European economy to enter a recession. Eight banks have collapsed or were rescued or bought since the seizure in credit markets started last year.
Roskilde Bank A/S, rescued by the central bank in August in Denmark's first such bailout in more than a decade, will allow 25 ``major'' sponsorships to run out, spokesman Stig Bo Jensen said.
Sydbank A/S last month pulled 38 million kroner ($6.6 million), or 20 percent of funds, from Banktrelleborg A/S's foundation after buying the lender, which had ``significant financial problems.'' Sydbank Chief Executive Officer Carsten Andersen said the fund, which supports events in the eastern city of Slagelse, will now ``support fewer local projects.''
``Banks have mainly focused on small sports associations, so they will be among the first to suffer,'' said Thomas Badura, director of SponsorPeople, a consultancy that organizes sponsorship. ``Banks will cut down to the bare bones.''
Oysters, Herring
Banks dominate Denmark's 2.5 billion kroner ($460 million) sponsorship market, according to Copenhagen-based SponsorPeople.
Denmark has 140 banks serving its 5.5 million people. That equates to 33 lenders per 1 million residents, compared with an average European ratio of 12, according to statistics from the European Banking Federation.
The landscape is changing as smaller banks get swallowed up.
Morsoe Bank A/S, a regional lender in northern Denmark, on Oct. 30 agreed to take over Sparekassen Spar Mors, a local rival riddled with bad loans. Sparekassen had helped the local fishing club restore creeks in an area known for oysters and herring.
The central bank and a group of Danish financial companies acquired Roskilde, based in the city of the same name, on Aug. 24 after an external audit showed the lender was insolvent.
`Whole City Hurt'
Headquartered close to a cathedral where Denmark buries its kings and queens, Roskilde sponsored handball, sailing and soccer clubs in the city. Located at the end of a fjord, Roskilde plays host each year to one of Europe's biggest music festivals, which has drawn bands ranging from Metallica to U2.
``The whole city is hurt by the financial crisis now,'' said Carsten Wickmann, chairman of F.C. Roskilde, which plays in Danish soccer's second tier. ``Roskilde Bank was a patron for the city's sport and cultural life so they're leaving a huge gap.''
Roskilde Svoemning, the city's biggest swimming club, suspended plans to build a club house after the collapse of the bank, which was one of its three biggest sponsors, according to Niels Kaare Bruun, head of sponsorship at the club.
``Without a clubhouse, it will be harder for us to develop and hold on to our elite swimmers,'' Bruun said. ``There's a nervous and pressured atmosphere among sport clubs now.''
`Very Sad'
About 120 miles west, VestjyskBank A/S bought Bonusbanken A/S on Sept. 29 as losses mounted at the smaller bank. Three months earlier, Bonusbanken donated 10,000 kroner to Hammerum Idraetsforening, a local soccer club with 400 members, helping it send 130 players to a tournament in the southern part of Denmark.
``Without sponsorships and donations, our players won't be able to go to tournaments,'' said Eigil Pedersen, the club's chairman. ``Bonusbanken was the last local bank left and it's very sad that it's gone.''
The government last month decided to guarantee all deposits to help lenders suffering from the seizure in the global credit markets. As part of the accord, Denmark's banks won't pay dividends for two years, cutting donations to the bank foundations which sponsor events across the Nordic country.
In Fjerritslev, Ebh, which uses the slogan ``We are where you are,'' backed local events through one such foundation.
The bank dropped plans to support the proposed sports center, which would have included a gym, swimming pool and a music hall, after the country's central bank was forced to inject emergency money into Ebh.
The bank also sponsors local soccer and handball club Fjerritslev IF and help finance an indoor training facility, Ebh Arena, which opened a month ago.
``This is a small town and Ebh has been a symbol of our unity,'' said Ellen Helvind, 77, chairwoman of Fjerritslev's city museum, which is located in the town's now-closed brewery, and a customer of the lender. ``The bank has been very generous, so we're all very concerned.''
To contact the reporters on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net
Last Updated: November 2, 2008 18:27 EST
